Former Freshfields Bruckhaus Deringer corporate head Barry O’Brien has agreed to pay £50,000 costs and been fined £9,000 for his role in acting on a conflict against Marks & Spencer (M&S) in 2004.
In a Solicitors Disciplinary Tribunal (SDT) hearing today (2 August) O’Brien admitted to claims by the Solicitors Regulation Authority (SRA) that he acted against the best interests of client M&S and that he brought the profession into disrepute when he agreed to act on Philip Green’s failed £9bn bid for the retail giant.
He agreed to pay the SRA’s £50,000 legal costs and has been ordered to pay £5,000 for not acting in the client’s best interests, as well as a £4,000 fine for bringing the profession into disrepute. The fines are at the upper end of what could have been given.
Freshfields had argued to the tribunal that O’Brien had already “suffered significant personal embarrassment and stress” as the issue has been widely reported in the press and he decided to stand down from the firm’s senior partner contest last year because of the ongoing investigation.
O’Brien apologised through his advocate for what he called a “bona fide” mistake and poor judgement on his behalf, with Freshfields admitting there was a level of culpability by the firm.
Freshfields said O’Brien had agreed not to contest the charges in return for accepting the proceedings and bringing the case to a close.
In a statement, Freshfields said: “Barry O’Brien, head of the Freshfields’ corporate finance practice, has reached an agreement with the SRA to end the long-running investigation into the firm’s acceptance of instructions in early 2004 to advise the Revival consortium on its possible bid for M&S. As part of the agreement Mr O’Brien did not contest the proceedings in front of the tribunal today and accepted a fine from the tribunal."
Co-senior partner Guy Morton added: “We are very grateful to Barry for volunteering, in the best interests of the firm, to bring these protracted proceedings to a close by not contesting the matter further. We very much regret that a bona fide and collective decision made by partners on behalf of the firm led to disciplinary proceedings.”
O’Brien told Legal Week: “I am extremely relieved it is all over. I am very grateful for the support I have received from firm and in particular from my clients.”
SRA chief executive Antony Townsend commented: “This is an important decision. City firms have a critical role to play in ensuring the integrity of the financial system and we are determined to ensure that they, like all solicitors firms whatever their size, are properly regulated.
“When we studied the judgments in the High Court and the Court of Appeal we instigated our own detailed investigation. Our concerns have been accepted by the tribunal and by Mr O’Brien, who admitted the allegation against him."
Following a three-year investigation, the hearing was delayed this morning as some of the SRA’s allegations were dropped. Both sides denied there had been a trade-off.
O’Brien faced the tribunal alone, with Legal Week exclusively revealing yesterday (1 August) that UK corporate chief Tim Jones would not face the tribunal after the Solicitors Regulation Authority (SRA) made an application last week for him to be withdrawn from the hearing.
In a statement, the SRA said: “The disciplinary proceedings have been withdrawn and matters resolved between Mr Jones and the SRA.”
O’Brien was supported at the tribunal by a large group of Freshfields’ top partners, including corporate stalwart Mark Rawlinson and former competition head Deirdre Trapp.
The regulatory side of the Law Society (now the SRA) began its investigation into the affair in 2004 after Freshfields was knocked off its role advising Green on the bid because it had previously advised the target. Green ended up paying Freshfields for 4,200 billable hours despite the troubles.
In October 2006 the SRA referred Jones and O’Brien to the SDT, which has the power to reprimand, fine and suspend or strike off solicitors.
Ashurst litigation head Ed Sparrow and Mark Howard QC from Brick Court Chambers represented O'Brien, while Herbert Smith litigation partner David Mayhew advised Jones. Geoffrey Williams QC was the Law Society’s counsel. The tribunal was chaired by Andrew Spooner.
The decision to drop Jones from the case and withhold further punishment for O’Brien will be seen as a major boost for Freshfields, which has faced sustained recent scrutiny of its internal management following its ongoing age discrimination battle with former partner Peter Bloxham.
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Editors' Blog: SRA has nothing to shout about as M&S saga ends with a whimper
